A Review of the Nigerian Energy Industry

Financial market update

06 February 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: With only two months away from the recapitalization deadline given by the Central Bank of Nigeria (CBN) to mortgage banks in the country, the President of the Mortgage Bankers Association of Nigeria (MBAN) and Chief Executive of Resort Savings and Loans Plc, Abimbola Olayinka has said the number of mortgage banks would be reduced to 25 from the current number of 70. According to him, some mortgage banks have already started their merger process, while others were in the process of raising funds to meet the recapitalization deadline

EUROPE: European stock futures were little changed, following the Stoxx Europe 600 Index’s biggest gain in almost four weeks, as companies from Vinci SA to Syngenta AG reported earnings. Futures on the Euro Stoxx 50 Index, a benchmark for the euro region, added 0.1 percent to 2,655 at 7:16 a.m. in London. The Stoxx 600, the Europe-wide benchmark, has gained 2.1 percent this year as U.S. lawmakers agreed on a budget deal and data signalled the world’s largest economy is recovering. The index slipped earlier this week on signs political uncertainty is returning in the region’s weakest economies.

INDIA: The rupee strengthened to a three and a half month high rising as much as 52.87 against the dollar, helped by gains in equities and inflows ahead of the government’s stake sale in state-run power producer NTPC.

CHINA: The pace of yuan appreciation is likely to pick up slightly over the next 12 month, underpinned by steady capital inflows into the world’s second-largest economy as growth recovers, according to a reuters poll. The median forecast by 29 strategists and economists showed the yuan is likely to strengthen to 6.15 per dollar by the end of January 2014.

Bonds – Market activity picked up yesterday with trade volumes the highest it has been in recent days. Market direction however remains unchanged as yields continue to head south. Yields expected to continue the downward trend over the next few weeks.

Bills – Demand slowing in the secondary market ahead of today’s auction. Some selling across the maturities with rates up about 15bps on average.

Money Market – OBB and unsecured O/N rates dipped to 10.75% and 11.00% as the market opened liquid yesterday.

Indicative Currency Exchange Rates
Bid              Offer

EURUSD             1.3536          1.3546
GBPUSD              1.5638          1.5648
USDJPY               93.67            94.07
USDCHF             0.9129           0.9149
GBPEUR             1.1551            1.1561
USDZAR             8.8440          8.9440
USDNGN            156.90           157.65
JPYNGN              1.6750           1.7250
CHFNGN             171.87            175.87
EURNGN             212.38          216.38
GBPNGN             245.36          249.36
ZARNGN              17.74              19.74

Brent crude futures held above $116 per barrel on Wednesday after positive economic data from the United States and Europe bolstered the view that the global economy is on the mend.
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

Interest rates
NIBOR (%)                           LIBOR (%)

O/N               11.5833              USD 1 month           0.1992
7 Day             11.9583              USD 2 month          0.2455
30 Day          12.2917               USD 3 month          0.2955
60 Day          12.5833              USD 4 month          0.3461
90 Day          12.8333              USD 6 month          0.4689
USD 12 month        0.7705
Y/Y Consumer Inflation December 2012 :            12.00%
FX Reserves: 31 January 2013 (USD bn)              45.984
MPR                                                                              12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria

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